May 2 (Bloomberg) -- Deutz AG, a German manufacturer of
engines for trucks, ships and farm equipment, swung to profit in
the first quarter as cost-cutting efforts gained traction.

Earnings before interest and taxed amounted to 1.9 million
euros ($2.6 million) compared with a loss of 6.4 million euros a
year earlier, the Cologne-based company said in a statement
today after its quarterly report was seen by Bloomberg News
after being temporarily posted on its website. Revenue advanced
18 percent to 343 million euros.

“Deutz in the first-quarter 2014 continued the good
operational development of the previous year,” the board of
management under Chief Executive Officer Helmut Leube said in
the report, which was accessible ahead of the scheduled release
on May 5. “We continue to work on optimizing our costs and
structures.”

The 150-year-old manufacturer, which has production
locations in China, Argentina and the U.S., is in the process of
closing sites in Germany to streamline manufacturing. It also
plans to outsource some engine production. In the report, Deutz
stuck to its forecast for Ebit, excluding one-time costs, to
reach more than 4 percent of sales this year.

“The company reiterated its 2014 guidance, so the coming
quarters will probably improve,” said Christian Ludwig, a
Dusseldorf-based analyst with Bankhaus Lampe.

Deutz gained as much as 5 percent to 6.31 euros in
Frankfurt today and was trading up 3.1 percent at 4:00 p.m. The
stock has lost 4.4 percent this year, valuing the company at 749
million euros.

Spending on the reorganization, which is aimed at lifting
profit by more than 10 million euros annually from 2016, is
expected to amount to as much as 20 million euros this year.

New orders in the quarter increased 6.6 percent to 414
million euros. The company narrowed the net loss to 0.5 million
euros from 6.9 million euros.